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Genzyme Acquires Verigen AG,
Bolstering Global Orthopaedic Franchise
Adds Second Generation Cell Therapy Product for Cartilage Repair
February 8, 2005 -- Genzyme Corporation (Nasdaq: GENZ) announced today that
it has acquired Verigen AG, a private company based in Germany with a
proprietary cell therapy product for cartilage repair currently sold in
Europe and Australia. This product, Matrix-induced Autologous Chondrocyte
Implantation (MACI®), will both expand Genzyme's orthopaedic offerings in
these markets, and provide a strong second generation product to develop for
the United States market. Carticel® (autologous cultured chondrocytes),
Genzyme's first generation product, has been used in more than 10,000
patients since it was introduced in 1995.
"This strategic acquisition will help advance our global orthopaedic
franchise by providing a strong second generation cartilage repair product
with a solid foundation in Europe and Australia," said Ann Merrifield,
president of Genzyme Biosurgery. "We look forward to building on Verigen's
established presence with orthopaedic surgeons in Europe and Australia -
where we already market Synvisc for pain from osteoarthritis of the knee -
and to launching US clinical trials for MACI by early 2006."
The transaction will provide Genzyme with cell culture facilities in Europe
and Australia to support sales in these territories. Genzyme has gained
substantial expertise in the manufacture of cell therapy products through
production of Carticel at its cell culture facility in Cambridge, Mass.
Genzyme has acquired Verigen for $10 million in initial payments, and
potential additional payments of up to $40 million over the next six years
based upon the achievement of development and commercial milestones. These
include approval of a biologic license application in the US, marketing
approval in the US, and royalties on sales. To date Genzyme has acquired
approximately 96 percent of Verigen's shares, and anticipates acquiring the
remaining shares in the first half of the year. The transaction is not
material to Genzyme from a financial standpoint.
A Simpler Procedure
Verigen's patent-protected MACI approach offers a more convenient method of
delivery than the traditional autologous chondrocyte implantation (ACI)
method used with Carticel. Both procedures begin when an orthopaedic surgeon
harvests a biopsy of healthy cartilage from a patient's knee and sends it to
a cell processing facility, where technicians grow millions of new cells.
These new cells are then delivered to the surgeon, who implants them into
the defect, where they produce new cartilage to effect a repair.
In Verigen's MACI procedure, technicians in the laboratory seed the
patient's cells onto a collagen membrane, which is fitted by a surgeon into
the cartilage defect and can be secured without suturing. MACI eliminates
the need for surgeons to suture a piece of the periosteum (the skin covering
the bone) over the implanted cells, as they do during the Carticel
procedure. As a result, MACI can be performed during a faster, less invasive
procedure than Carticel surgery, offering advantages for surgeons and
patients. MACI has been delivered to more than 3,200 patients in Europe and
Australia since it was first offered in 1998.
Cell Therapy at Genzyme
Genzyme has more than a decade of experience in developing and manufacturing
autologous cell therapy products that have been used to treat thousands of
patients. Epicel® (cultured epidermal autografts), a cell therapy for
treating patients with severe burns, is also manufactured by Genzyme.
Together, Carticel® and Epicel® represent the first such products ever
brought to market in the United States, providing Genzyme with superior
scientific and commercial expertise in this field. Carticel was licensed by
the U.S. Food and Drug Administration in 1997.
Genzyme is also conducting cell therapy research in novel treatments for
heart disease, and is exploring the use of adult stem cells in treating a
variety of diseases. Its largest cell therapy development effort is the
ongoing Phase 2 MAGIC trial (Myoblast Autologous Graft in Ischemic
Cardiomyopathy), designed to determine whether cell therapy can be used to
reverse damage done to cardiac muscle following a heart attack, or to safely
halt a patient's further progression of heart failure. The trial is
currently being conducted in Europe with plans to enroll up to 300 patients.
About Carticel
Carticel® is indicated for the repair of symptomatic, cartilaginous defects
of the femoral condyle (medial, lateral or trochlear), caused by acute or
repetitive trauma, in patients who have had an inadequate response to a
prior arthroscopic or other surgical repair procedure. Carticel® is not
indicated for the treatment of cartilage damage associated with
osteoarthritis. It should not be used in patients with a history of allergy
to the antibiotic gentamicin or in those with sensitivities to materials of
bovine origin or in patients who have previously had cancer in the bones,
cartilage, fat, or muscle of the treated limb. Data regarding outcomes
beyond three years are limited. Any instability of the knee or malalignment
of the joint should be corrected prior to or concurrent with Carticel®
implantation. Use in children, or in joints other than the knee has not yet
been assessed. The most frequently reported adverse events are: hypertrophic
tissue at the repair site, intraarticular adhesions, superficial wound
infection, hypertrophic synovitis, and post-operative hematoma.
About Genzyme
One of the world's leading biotechnology companies, Genzyme is dedicated to
making a major positive impact on the lives of people with serious diseases.
Founded in 1981, Genzyme has grown from a small start-up to a diversified
enterprise with annual revenues exceeding $2 billion and nearly 7,000
employees in locations spanning the globe. With many established products
and services helping patients in more than 80 countries, Genzyme is a leader
in the effort to develop and apply the most advanced technologies in the
life sciences. The company's products and services are focused on rare
inherited disorders, kidney disease, orthopaedic, cancer, transplant and
immune diseases, and diagnostic testing. Genzyme's commitment to innovation
continues today with a substantial development program focused on these
fields as well as heart disease and other areas of unmet medical need.
This press release contains forward-looking statements,
including the statements regarding: the extent to which this acquisition
ultimately advances Genzyme's orthopaedic franchise, the extent to which
Genzyme is able to increase Verigen's existing business, the extent to which
Genzyme is able to obtain regulatory approval to market and sell MACI in the
United States, the extent to which Genzyme ultimately obtains 100% of the
outstanding shares of Verigen and the extent to which Genzyme ultimately
enrolls up to 300 patients in the on-going MAGIC trial. These statements are
subject to risks and uncertainties that could cause actual results to differ
materially from those projected in these forward-looking statements. These
risks and uncertainties include, among others, Genzyme's ability to
successfully market and sell MACI, the continued and increased market
acceptance of MACI, the ability of Genzyme to satisfy the regulatory
requirements in the United States associated with obtaining marketing
approval for MACI, Genzyme's ability to avail itself of the statutory
provisions under German law that allow it to buy out minority shareholders,
the extent to which the safety and efficacy of the therapy in the MAGIC
trial is demonstrated and the factors discussed under the caption "Factors
Affecting Future Operating Results" in Genzyme's Quarterly Report on Form
10-Q, for the period ended June 30, 2004. We caution investors not to place
undue reliance on the forward-looking statements contained in this document.
These statements speak only as of the date of this document and we undertake
no obligation to update or revise the statements.
Genzyme®, Carticel® and Epicel® are registered trademarks of Genzyme
Corporation. MACI® is a registered trademark of Verigen AG.
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